Business

Real(i)ty bites – Canberra house prices fall seven per cent

The ABC reports that house prices in the ACT have fallen by seven per cent in the past three months. Annualized, that turns into a whopping 28 per cent fall!

Of course, this news is accompanied by the usual REIACT statements hosing down any negative consequences for house sellers. I wouldn’t have guessed it, but it turns out that now really is a great time to put your house on the market.

Thoughts anyone?

While this will have negative consequences for ppl who borrowed heavily to purchase at the top of the boom and now have no choice but to sell, I think that this is great news for everyone else. The sooner that we can forget about the possibility of a whole generation never being able to afford to buy a house, the better.

I own my own place, but wanted to point out that $400k is actually a lot of money for people starting out with no equity – which is the position most first home buyers find themselves in.

In fact, arguing that there’s no affordability problem because you can get a 3-4 bedroom house for $400,000 is pretty glib. To save a $40k deposit from scratch, whilst paying Canberra rent, is a hell of an effort. Particularly if you’re on a single wage. Oh, and you’ll need $17-18k to pay stamp duty, as well.

According to allhomes, there are almost 240 3 and 4 bedroom houses for sale at 400k and under, right now. In Canberra and r surrounding area (like QBN). Housing seems expensive now because we are just past the top of the cycle. In a few years when incomes have caught up a bit, it won’t seem so bad.

But fundamentally, well located and desribale propertyy has nowhere to go but up in the longer term.

It will take serious land release, not a token govco gesture. If you want the price to drop, thousands of blocks will need to hhit the market. And even then it will take years for all the building to get fiunished.